An upsurge in complaints has prompted a review of premium-rate telephone
services, Janet Izatt says
Concern over the number of complaints about premium-rate telephone
competitions has prompted the telephone services watchdog, the
Independent Committee for the Supervision of Standards of Telephone
Information Services, (ICSTIS) to launch a review of the industry.
Premium-rate service (PRS) competitions were the largest single source
of complaints to the watchdog last year, accounting for more than a
quarter of the 3,252 complaints received.
Half of these related to technical problems and, ironically, most
complaints were received from non-competition players.
ICSTIS says that around 73,000 PRS competitions - where a premium-rate
telephone number is used to enter a competition either by simply
recording entry details from the caller or by allowing the entrant to
answer questions - are run every year.
One of the major concerns of ICSTIS is the doubtful legality of some PRS
competitions. The Gaming Board of Great Britain has also questioned
whether some competitions are actually lotteries because they do not
require the level of skills needed for genuine competitions.
Last year, Sky ran a competition called Telemillion, offering viewers
the chance to win pounds 250,000. The service provider, Interactive
Telephone Services, was found guilty of running an illegal lottery
rather than a competition, a move that shocked the industry. The court
decided that, although participants had to answer questions requiring
skill, the 60 per cent of entrants who answered them correctly were then
entered into a draw and the eventual winner was selected by chance
ICSTIS is also investigating the proportion of revenue allocated to
prizes compared with the amount of revenue generated and whether the
rules, conditions and management of PRS competitions give consumers a
fair chance to win.
The watchdog is canvassing the views of a wide-ranging number of
interested parties, from the Independent Television Commission, to the
police, the government, and the Gaming Board.
Agencies that create the competitions and are governed by ICSTIS as
service providers, have welcomed the review because it could end what
has been an expensive and frustrating legal process.
‘No self-respecting company is going to provide services outside the
law. All service providers have spent hundreds of thousands of pounds on
legal fees in an attempt to stay within the law. But there are so many
woolly areas that we welcome this review if it can clarify those areas,’
says Bill Heath, the chairman of the Direct Marketing Association’s
automated call-handling group, which represents the majority of service
The cut-off date for the consultation process is 12 August. Any changes
to the code will be made in the autumn.
Anthony Smith, the associate director at ICSTIS, says: ‘At the end of
the consultation period we will consider all the responses and look at
where changes to the code should be made. If so, that will happen at the
end of the this year.’
FACTS AND FIGURES
The service Premium-rate services are those where the revenue from a
telephone service is shared by a network operator and service providers
at a previously agreed rate.
Prefixes PRSs operate on designated prefixes at specified tariffs -
0891 is well known, and currently charges between 39p and 49p per
Turnover The total PRS industry turnover in 1995 was approximately
pounds 260 million.
Calls Up to 20,000 services are in operation and it is estimated that
almost five million PRS calls are made each week.
Categories Competitions generally fall into five categories: scratchcard
leaflets distributed in the press ; daily newspaper competitions ;
catalogue-style competitions; television alternative-choice answer
competitions; and television skill competitions.